Toms Shoes’ model of giving away a pair of shoes for each sold helped the company but was disastrous for recipient countries, critics say
No company has done more to put caring capitalism on the map than Toms Shoes. The for-profit Californian company is considered by many to be a shining example of ethical branding, with a business model that is aligned with meaningful causes. Every purchase from the company triggers a donation of a product or service in the developing world, so that shopping becomes a ritual engagement with social activism.
The giving model has also given back – in spades: Toms – short for “tomorrow’s shoes” – has enjoyed annual growth rates of up to 300% over the past decade, and given away 35m pairs of shoes, spending virtually nothing on traditional advertisers and relying instead on word of mouth and its 5 million social media followers.
Civil society groups, however, point to a darker side of the Toms story. They say Toms has made mistakes and potentially hurt the very people it has tried to help, after discovering that giving was not as easy as it had thought. And they say the lessons of Toms still haven’t been learnt by other companies trying to do good.
The problem with quick solutions
The Toms story starts 10 years ago, when entrepreneur Blake Mycoskie,...